Alphabet is attempting to purchase HubSpot

According to a Reuters report, Alphabet—Google's parent company—is currently attempting to purchase HubSpot, an online marketing software company valued at $35 billion (about 32.292 billion euros).

If Alphabet decides to proceed with the bid, it would mark a rare occurrence of a major technology firm attempting a mega-deal amid the regulatory scrutiny facing the sector, especially under the administration of U.S. President Joe Biden. 

The potential acquisition would be the largest in Alphabet's history. It would allow it to tap into some of its cash reserves, which reached $110.9 billion (about €102.324 billion) at the end of December.

According to information published by the news agency, Alphabet has held talks with Morgan Stanley investment bankers in recent days about the feasibility and implications of a bid for HubSpot. In particular, financial details have been discussed, and the possibility of antitrust authorities approving such a transaction has been evaluated.

At the moment, Alphabet still needs to submit a formal bid for HubSpot and, according to sources close to the matter, there is no certainty that it will do so. "As standard practice, HubSpot does not comment on rumors or speculation. Our focus remains on building a strong business and meeting the needs of our customers," a HubSpot spokesperson stressed. Alphabet and Morgan Stanley have yet to respond to requests for comment.

HubSpot shares rallied 11%

HubSpot shares rallied by 11% to $693 (€639.4) on Thursday due to the potential buyout, while Alphabet shares saw a slight 1% decline, closing at $153.34 (about €142).

HubSpot, publicly traded since 2014, offers marketing software to companies, generally with up to 2,000 employees. Despite posting a loss of $176.3 million (about €163 million) in 2023, the company generated revenues of $2 billion (€1,845.4 million), which has generated excitement among investors and boosted its share price by 50% in the past 12 months.

Regardless of this operation result, Google is currently facing several antitrust actions, including a landmark lawsuit accusing it of abusing its position as an online search leader. Alphabet CEO Sundar Pichai is looking for avenues to boost growth after the company revealed last January that fourth-quarter ad sales came in below expectations.

According to Dealogic data, the technology sector was a leading player in M&A during the first quarter of the year, with growth of more than 42% year-on-year to $154 billion (about €142,056.5 million).